New FEC Appointments Fail to Address Key Recommendations

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By Kenneth P. Doyle

Aug. 12 — The Federal Election Commission filled two long-pending vacancies in its Office of the General Counsel, making permanent appointments to head the office's litigation and policy divisions, but the FEC did not implement key recommendations from its inspector general to appoint a general counsel and chief financial officer.

The agency named Kevin Deeley as FEC associate general counsel for litigation and Adav Noti as associate general counsel for policy. Both are longtime FEC staff attorneys who headed the respective divisions in an acting capacity for more than a year.

The appointments failed, however, to address key recommendations, such as those included in a recent report commissioned by the FEC inspector general (See previous story, 07/27/16).

The IG report said the FEC commissioners should agree to appoint a permanent general counsel, filling a 3-year-old vacancy in that post. In addition, the report said the FEC should appoint a permanent chief financial officer and separate the jobs of staff director and chief information officer, which are currently held by a single manager.

Commissioners Divided

The unresolved management problems result from divisions among the FEC commissioners, who also have been deeply divided over policy and enforcement matters. The six-member FEC is composed of three commissioners recommended by Democrats and three by Republicans. They frequently have deadlocked along party lines in votes on key issues.

The votes of at least four commissioners are required for key staff appointments and policy decisions.

The recent IG report said the divisions among the commissioners are the driving factor in employee morale problems at the FEC.

The commission issued a statement following release of the report last month, which thanked the Office of FEC Inspector General Lynne McFarland for working on the study and thanked FEC employees who contributed by responding to surveys and participating in interviews and focus groups.

“We are reviewing and considering the report carefully, and plan to work with staff to develop constructive solutions,” the commission statement said.

Republican commissioner Caroline Hunter responded separately, however, saying that the FEC commissioners “should not dilute their strong commitment to legal principles for the sake of staff morale.”

General Counsel Post Long Vacant

The long-standing problems in filling top FEC staff positions have been cited in past criticisms of the agency, including in a report released last year by McFarland, the FEC inspector general. The earlier report noted that the FEC has not had a permanent general counsel since Anthony Herman left the post in 2013 following disputes with some of the commissioners over enforcement policies.

The agency's chief enforcement attorney, Daniel Petalas, was elevated to become acting general counsel last year, but there has been no word since then about whether or when a permanent general counsel appointment would be made by the commissioners.

Petalas continues to serve indefinitely in an acting capacity as general counsel. In addition, Kathleen Guith continues to serve in an acting capacity as Petalas's successor as associate general counsel in charge of the FEC enforcement division.

The recent IG report on FEC staff morale said Petalas was among the top FEC managers widely viewed as ineffective by rank-and-file employees. The report also was especially critical of Alec Palmer, the FEC staff director. One cause of morale problems is that Palmer, while serving as staff director, also is the agency's chief information officer, heading the FEC information technology division—a dual role that has led to management problems, the report said.

Meeting Agenda Includes Ravel Proposal

The FEC announced the Deeley and Noti appointments to the FEC general counsel's office as it prepared for an open meeting set for Aug. 16. According to a meeting agenda, the commissioners are set to consider a draft advisory opinion approving a new online fundraising and contribution platform developed by a company called eBundler.com LLC.

The meeting agenda also includes several regulatory items that have been discussed previously by the FEC but remain unresolved. These include proposals for new rules regarding political party contributions and for “technological modernization” of FEC regulations.

In addition, the agenda includes a new proposal by Democratic commissioner Ann Ravel to rescind a 2006 FEC advisory opinion (AO 2006-15), which allowed domestic subsidiaries of foreign companies to establish political action committees and pay the administrative costs of those PACs.

Ravel said in an Aug. 9 memo explaining the proposal that the role of foreign-owned companies in U.S. campaigns should be re-examined in the wake of the 2010 Supreme Court decision in Citizens United v. FEC. The decision gave corporations greater leeway to spend money to influence U.S. campaigns and has led to a major increase in campaign funding by super PACs and other outside groups.

Ravel cited recent incidents of alleged foreign involvement in funding U.S. campaigns and said there was a growing threat of foreign influence. She said the FEC should address the issue by limiting the ability of foreign-controlled companies to provide campaign money.

“Our campaign finance system is vulnerable to influence from foreign nationals and foreign corporations through Domestic subsidiaries and affiliates in ways unimaginable a decade ago,” Ravel's memo said.

To contact the reporter on this story: Kenneth P. Doyle in Washington at kdoyle@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com

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